Corporate results: Adamjee Insurance profits firm 7% on investment income

Adamjee Insurance approved a cash dividend of Re1 for every ordinary share of Rs10.

KARACHI:

Adamjee Insurance Company’s net profit rose 7% to Rs318 million in the first half of 2011 on the back of two-fold jump in investment income.

The insurance giant’s board of directors in a meeting on Tuesday also approved a cash dividend of Re1 for every ordinary share of Rs10, according to a notice sent to the Karachi Stock Exchange.

Although core underwriting business declined 24%, the increase in investment income brought the net profit higher, said Topline Securities analyst Farhan Mahmood.

The company’s investment income doubled to Rs446 million in the first six months of 2011 compared with Rs223 million in the same period last year.

The company’s stock price rose 1.6% to close at Rs48.62 during trade at the Karachi Stock Exchange.

Net premium grew by 8% but higher growth in claim ratio, up 14%, dragged underwriting profits to Rs300 million, added Punjani.

The break-up of underwriting shows that miscellaneous topped with Rs111 million, followed by ‘marine aviation and transport’ segment with Rs102 and ‘fire and property damage’ with Rs50 million.

The entire sector performed well in the period under review as Pakistan Reinsurance switched to profit of Rs378 million in the first half of 2011 while comparatively smaller companies Silver Star Insurance’s net profit rose 19% to Rs60 million and United Insurance Company’s net profit increased 3% to Rs76 million during January to June 2011.

Published in The Express Tribune, August 31^st,  2011.